Defendants Robinhood Markets, Inc., Robinhood Financial LLC and Robinhood Securities, LLC's Sur-Reply to Plaintiffs' Motion for Leave to File a Renewed Motion for Class Certification — In re January 2021 Short Squeeze Trading Litigation (Dkt. 638-1, S.D. Fla.)

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Defendants Robinhood Markets, Inc., Robinhood Financial LLC and Robinhood Securities, LLC's Sur-Reply to Plaintiffs' Motion for Leave to File a Renewed Motion for Class Certification (Document 638-1) in In re: January 2021 Short Squeeze Trading Litigation, Case 1:21-md-02989-CMA, U.S. District Court for the Southern District of Florida, entered on the FLSD docket January 16, 2024 and relating to the Federal Securities Tranche. The eight-page sur-reply, responding to the Motion at Dkt. No. 624, argues that Plaintiffs fail to establish good cause under Rule 16 for a second motion for class certification and for reopening class certification expert discovery months after the scheduling order closed it. It is signed by counsel from Hunton Andrews Kurth LLP and Cravath, Swaine & Moore LLP.

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 21-MD-2989-ALTONAGA/DAMIAN
In re:
JANUARY 2021 SHORT SQUEEZE
TRADING LITIGATION
_____________________________________/
This Document Relates to the Federal Securities Tranche
DEFENDANTS ROBINHOOD MARKETS, INC., ROBINHOOD FINANCIAL LLC AND
ROBINHOOD SECURITIES, LLC’S SUR-REPLY TO PLAINTIFFS’ MOTION FOR
LEAVE TO FILE A RENEWED MOTION FOR CLASS CERTIFICATION
Case 1:21-md-02989-CMA   Document 638-1   Entered on FLSD Docket 01/16/2024   Page 1 of 8

Robinhood Markets, Inc., Robinhood Financial LLC and Robinhood Securities,
LLC (together, “Robinhood”) hereby submit this sur-reply memorandum in response to
Plaintiffs’ motion for leave to file a renewed motion for class certification (Dkt. No. 624, the
“Motion”).
ARGUMENT
In reply, Plaintiffs fail to establish good cause supporting their request to file a
second motion for class certification and to reopen class certification expert discovery months
after the governing scheduling order closed that portion of this litigation.  Plaintiffs fail even to
engage in the governing standard and case law under Rule 16, wholly ignoring the issue.  They
also concede the following salient legal principles and facts:
●
Courts in this District routinely hold that, “in the absence of materially
changed or clarified circumstances, or the occurrence of a condition on
which the initial class ruling was expressly contingent, courts should not
condone a series of rearguments on the class issues[.]”  Cabrera v. Gov’t
Emps. Ins. Co., No. 12-61390-CIV, 2015 WL 464237, at *5 (S.D. Fla. Jan.
16, 2015) (quoting Washington v. Vogel, 158 F.R.D. 689, 692-93 (M.D.
Fla. 1994));
●
“District Courts look unfavorably on requests to alter or amend a class
certification order which rely on factors or theories which were previously
available to parties.”  Signor v. Safeco Ins. Co. of Ill., No. 19-61937-CV,
2021 WL 4990312, at *3 (S.D. Fla. July 20, 2021);
●
There has been no change in the law since their prior motion for class
certification.  Every case that Plaintiffs now identify as supporting their
renewed motion for class certification was not only available to them at
the time they filed their motion for class certification on the schedule
ordered by the Court, but also was cited or discussed extensively in the
prior briefing; and
●
The law review article that Plaintiffs cite as providing the basis for their
renewed motion for class certification was published years before this case
was even filed and was available to Plaintiffs when they filed their now-
rejected motion for class certification.
Rather than dispute these dispositive legal and factual points, Plaintiffs present
two new arguments to support their request to try again at class certification:  (1) they now have
access to Robinhood’s data on cancellation of customer orders, which they argue is critical to
their new theory without ever explaining why they need it for the motion, why they never raised
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the fact that they might need that data in connection with class certification before the Court
denied their timely-filed motion or why they did not seek more time to obtain that data and file a
single motion for class certification; and (2) the new argument they want to make is novel, and
this somehow excuses their failure to make the argument on the schedule ordered by the Court.
Neither argument has merit.  And both arguments ignore the substantial prejudice their tactical
decisions or lack of diligence will cause to the Court and Robinhood if they are permitted a do-
over.
First, Plaintiffs seek to justify their need to file a second motion for class
certification based on the fact that Robinhood recently produced data concerning customer order
cancellations (i.e., proposed customer purchases of the Affected Stocks1 that were cancelled,
internally at Robinhood, when the restrictions at issue in this case were implemented).  This is
nothing more than a pretext, and is unavailing in any event.
Notably, although Plaintiffs spend pages of their reply discussing this data as the
core reason they now should be entitled to file a renewed motion (suggesting that, without it,
they could not have moved on their new argument before), that is the first time they have ever
linked the two issues.  In their opening papers requesting a modification to the scheduling order,
Plaintiffs argued to the Court that “Plaintiffs request until February 15, 2024 to file their renewed
motion for class certification because they only recently received an extraordinarily large data set
from FINRA that requires extensive and complicated analyses that cannot be completed before
then.”  (Motion at 1-2.)  The FINRA data—data maintained by FINRA, which involve
transactions that brokers report to FINRA, and obtained through a third-party subpoena—is
separate from the internal Robinhood cancellation data that Plaintiffs now claim is critical.2
1 “Affected Stocks” refers to “common stock in AMC Entertainment Holdings, Inc., Bed
Bath & Beyond Inc., BlackBerry Ltd., Express Inc., GameStop Corp., Koss Corp., Tootsie Roll
Industries Inc., or American Depositary Shares of foreign-issuers Nokia Corp. and trivago N.V.”
(Dkt. No. 527, Consolidated Class Action Complaint ¶ 1.)
2 As Defendants pointed out in their Opposition, Plaintiffs can hardly rely on the FINRA
data as a justification for a renewed motion for class certification when Plaintiffs did not even
seek that data until after they filed their initial motion.  (Dkt. No. 631 at 13 n.5)  Plaintiffs’ only
response is to say that it would have taken awhile to get the data, so they should not be faulted
for moving forward with class certification on the schedule ordered by the Court rather than
awaiting that data.  (Reply at 7-8.)  Once again, that argument concedes either a tactical decision
to move forward with the case rather than make the argument they now want to make, or a lack
of diligence in waiting more than five months after discovery opened to subpoena the data and a
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Plaintiffs also never mentioned the cancellation data in connection with their proposal to move
again for class certification in any of the meet and confer discussions or correspondence with
Defendants following the Court’s denial of the timely motion for class certification.
The Robinhood cancellation data is also a red herring.  While Plaintiffs
subpoenaed transaction data from FINRA and the other brokers, they did not even ask the other
brokers for their internal cancellation data.  This alone undermines Plaintiffs’ new argument that
cancellation data is critical.  It also confirms that any effort to use the cancellation data to justify
their renewed motion is a subterfuge, as comparing Robinhood cancellation data to market
trading volume and analyzing any impact the Robinhood cancellations might purportedly have
had on securities prices would be an unreliable, apples to oranges comparison.
Moreover, the total number of shares of the Affected Stocks that were subject to
transactions cancelled by Robinhood during the class period is immaterial to any price impact
analysis.3  The total number of such shares was just over 5.6 million shares.  In total, the volume
of transactions actually executed on Robinhood’s platform alone in the Affected Stocks during
the putative class period was approximately 242 million shares, meaning the cancelled shares
were just over 2 percent of the shares actually transacted in those symbols on Robinhood during
the relevant time.  And, more importantly, total market volume during the putative class period
in the Affected Stocks was more than 5.4 billion shares, meaning the Robinhood cancellations
were less than 1 percent of market trading volume (indeed, less than one-twentieth of 1 percent),
which is unsurprising given that overall, transactions in all of the Affected Stocks executed on
the Robinhood platform during the week before the putative class period averaged about 4.5% of
market volume.  (Dkt. No 567-20, Grenadier Rep. ¶¶ 30, 150; 250 ex. 17.)  This relatively small
number of potential additional trades if these Robinhood customer orders had not been cancelled
lack of diligence in raising the issue that this data might be relevant to what they now believe is a
key argument for class certification with the Court in the context of a potential modification to
the scheduling order.  Either eventuality forecloses their motion, as neither provides good cause
to modify the scheduling order or permit a renewed motion.  (Opp’n at 13 n.5.)
3 Notably, only some of the transactions in the Affected Stocks that were cancelled by
Robinhood during the class period had anything to do with the restrictions at issue in this case.
As Robinhood has explained to Plaintiffs, the cancellation data is not stored in a manner that
would permit any party to determine the specific reason for any particular cancellation.  Thus,
some of the cancellations reflected in the produced data are entirely unrelated to any issue in this
litigation.
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(a small fraction of 1 percent of trades actually executed) could not possibly have moved the
market.  There is no credible argument that this small number of potential transactions is critical
to a price impact argument, and, as noted, without cancellation data from other brokers Plaintiffs
cannot even estimate the impact of Robinhood’s cancellations relative to the market writ large.
This is perhaps why Plaintiffs never raised cancellation data as an issue that is allegedly critical
to class certification before their reply brief.
Finally, the only case cited by Plaintiffs to justify a renewed motion for class
certification based on the cancellation data is inapposite.  In that case, Pinnock-Lee v. Phelan
Hallinan, PLC, No. 14-60154-CIV, 2015 WL 12532742, at *1 (S.D. Fla. Jan. 29, 2015), report
and recommendation adopted sub nom. Lee v. Phelan Hallinan, PLC, No. 14-60154-CV, 2015
WL 12533008 (S.D. Fla. Feb. 4, 2015), the Court permitted a second motion for class
certification when the first motion had been denied due to a lack of numerosity, in part because
the defendants did not contest the renewed motion and had in fact jointly moved with the
plaintiffs for preliminary approval of a class settlement agreement.  There, the plaintiffs were
able to take targeted discovery after the initial denial to address the numerosity issue, and that
additional evidence was dispositive on the factual issue that drove the initial denial.  Here, as
noted, Plaintiffs have failed even to explain how the cancellation data is material to their
proposed new argument and, more importantly, have failed to explain why they could not have
made their new argument earlier or, with the exercise of any diligence, even once they realized
that this data had any relevance to class certification, sought its production on a timeframe that
would have allowed for its use on the schedule ordered by the Court or asked the Court for a
modification to the original schedule at the appropriate time so as to avoid multiple rounds of
class certification expert reports and motions.  Again, Plaintiffs either never thought of the issue
or made the tactical decision to roll the dice on the arguments they did not make.  That approach
cannot support a second round of briefing.
Second, Plaintiffs argue that the novelty of their new proposed argument justifies
their failure to make this argument before.  Plaintiffs are, of course, correct that their new
proposed argument is novel and has not been adopted by any court to date.  But the novelty of
Plaintiffs’ new proposed argument is irrelevant to the issue currently before the Court:  Plaintiffs
cite no case suggesting that “novelty” somehow absolves them from their failure to make the
argument in the original motion.  The argument would have been just as novel if they had made
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it on the schedule ordered by the Court, and there has been no change in the case law that
changes the likelihood that this proposed departure from existing law will be rejected.
Tellingly, Plaintiffs never actually say directly why they failed to make this
argument on the schedule ordered by the Court.  For example, Plaintiffs never state that they
considered making this argument but decided not to because it was novel, although they suggest
that possibility by arguing they “should not be faulted” for failing to present the argument when
they presented four other arguments that (they claim) were grounded in existing law.  (Reply
at 1.)  To the extent that Plaintiffs did make a strategic decision not to pursue their new argument
on the schedule proposed by the Court, that provides a reason to deny the request, not to grant it.
See, e.g., O’Neill v. Home Depot U.S.A., Inc., 243 F.R.D. 469, 482 (S.D. Fla. 2006) (Altonaga,
J.) (holding that “any arguments the party failed to raise in the earlier motion will be deemed
waived”), dismissed, No. 05-61931-CIV, 2007 WL 1718931 (S.D. Fla. Jan. 29, 2007);
Washington v. Vogel, 158 F.R.D. 689, 692-93 (M.D. Fla. 1994) (declining to reconsider denial of
class certification, reasoning that decision of plaintiff’s counsel to originally seek certification
under only Rule 23(b)(2) was a “tactical decision” that did not constitute “changed
circumstances” warranting reconsideration).4  If, on the other hand, Plaintiffs simply did not
think of this argument on the schedule ordered by the Court, that lack of diligence also forecloses
a second motion.  (Dkt. No. 631, Opp’n at 11.)5
Third, Plaintiffs ignore the prejudice that would result from continued delay and
litigation over class certification due to their own tactical decision not to present their new
argument on the schedule ordered by the Court or their lack of diligence in identifying the
4 See also Mogel v. UNUM Life Ins. Co. of Am., 677 F. Supp. 2d 362, 365 (D. Mass. 2009)
(“[L]ate amendments to assert new theories are not reviewed favorably when the facts and the
theory have been known to the party seeking amendment since the inception of the cause of
action.”) (quoting Acri v. Int’l Ass’n of Machinists & Aerospace Workers, 781 F.2d 1393, 1398
(9th Cir. 1986)); Williams v. Baldwin Cnty. Comm’n, 203 F.R.D. 512, 518 (S.D. Ala. 2001) (“To
obtain such an amendment to the scheduling deadlines carefully selected by this Court [to admit
additional expert testimony], the Plaintiff bore the burden to show extraordinary circumstances
and that he diligently pursued discovery.  Plaintiff has failed to meet this burden.”).
5 The fact that the Court denied the timely-filed motion for class certification without
prejudice does not change the analysis, as the inquiry as to whether a modification of the
scheduling order is appropriate remains subject to the Rule 16 standards and whether a renewed
motion is appropriate is subject to the standards set forth above and in Defendants’ opposition.
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argument previously (whichever was the case, since Plaintiffs still have not explained which it
was).  Their only argument on this front is the assertion that the prejudice could have been
reduced—thereby conceding at least some prejudice—if Defendants agreed to give Plaintiffs yet
more time to address class certification by merging their proposed replacement class certification
expert report with the upcoming merits reports, and briefing class certification at the same time
the parties likely will brief summary judgment.  (Reply at 5, 8.)  This misses the point; class
certification is a threshold issue that the courts have repeatedly held should be decided at an early
stage in the case.  Fed. R. Civ. P. 23(c)(1) (“As soon as practicable after the commencement of
an action brought as a class action, the court shall determine by order whether it is to be so
maintained.”); see also Vega v. T-Mobile USA, Inc., 564 F.3d 1256, 1279 (11th Cir. 2009) (“Rule
23 demands an early consideration of class certification, including its practical implications for
case manageability” in order to avoid undue delay in consideration of the class-certification issue
that would “introduc[e] needless and avoidable complexity into an already complex case.”).
Consistent with this authority, the Court set a schedule that required class
certification proceedings at the outset of the case and then expended substantial time in issuing a
detailed decision well before fact discovery in this case ended and well before expert merits
discovery commenced.  Plaintiffs now want to redo the class certification expert work and
briefing, and push resolution of that issue out until well after all merits discovery has been
completed and summary judgment potentially briefed, all to assert a theory they could have
asserted on the schedule originally set by the Court.  That fundamentally prejudices all parties
and the Court, is directly inconsistent with the case management plan the Court adopted in the
scheduling order and ignores the reality that class certification is addressed early in the case—as
it was here—for the practical reason that a decision granting or denying class certification often
has a significant impact on how, and whether, the case proceeds.  See, e.g., Gustafson v. BAC
Home Loans Servicing, LP, No. SACV 11-915-JLS, 2014 WL 10988335, at *2 (C.D. Cal. Feb.
5, 2014) (denying motion for leave to file renewed motion for class certification where “allowing
[the renewed motion] under the present circumstances would promote tactics that waste the
limited resources of the Court and unnecessarily protract the litigation”); Shasta Linen Supply,
Inc. v. Applied Underwriters, Inc., No. 2:16-cv-158 WBS AC, 2019 WL 3244487, at *2 (E.D.
Cal. Apr. 17, 2019) (“Allowing [plaintiffs] leave to bring arguments they could have raised
earlier would place an undue burden on defendants and waste the court’s limited resources.”).
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CONCLUSION
For the foregoing reasons, and for the reasons set forth in Defendants’ Response
to Plaintiffs’ Motion for Leave to File a Renewed Motion for Class Certification, Defendants
respectfully request that the Court deny Plaintiffs leave to file a renewed motion for class
certification and/or any further expert reports in support of class certification.
Dated:  January 16, 2024
/s/ Samuel A. Danon
HUNTON ANDREWS KURTH LLP
Samuel A. Danon (FBN 892671)
María Castellanos Alvarado (FBN 116545)
Tom K. Schulte (FBN 1025692)
333 S.E. 2 Avenue, Suite 2400
Miami, FL 33131
Telephone:  (305) 810-2500
Facsimile:  (305) 810-2460
sdanon@huntonak.com
mcastellanos@huntonak.com
tschulte@huntonak.com
CRAVATH, SWAINE & MOORE LLP
Antony L. Ryan
Kevin J. Orsini
Brittany L. Sukiennik
825 Eighth Avenue
New York, NY 10019
Telephone:  (212) 474-1000
Facsimile:  (212) 474-3700
aryan@cravath.com
korsini@cravath.com
bsukiennik@cravath.com
Counsel for Defendants Robinhood
Markets, Inc., Robinhood Financial LLC
and Robinhood Securities, LLC
Case 1:21-md-02989-CMA   Document 638-1   Entered on FLSD Docket 01/16/2024   Page 8 of 8

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